Zumiez Q3 Profit Declines; Backs FY09 Earnings Outlook - Update
11/20/2008 5:01 PM ET
(RTTNews) -
Zumiez, Inc. (ZUMZ: News ), a retailer of sports related apparel, footwear and accessories, Thursday reported a decline in its earnings for the third quarter, as comparable store sales decreased 5.8% negatively impacted by lower consumer spending. The company reaffirmed its fiscal 2009 earnings outlook.
The Everett, Washington-based company's net income for the third quarter declined to $6.8 million or $0.23 per share, compared to net income of $8.1 million or $0.28 per share in the same quarter last year, in line with analysts' estimates. On average, fourteen analysts polled by First Call/Thomson Financial expected earnings of $0.23 per share for the quarter. Analysts' estimates typically exclude one-time special items.
Net sales for the quarter increased 7.9% to $112.2 million from $104.0 million last year, and topped Street estimates of $111.67 million for the quarter.
Comparable store sales for the quarter decreased 5.8% compared to a 13.2% increase in the prior-year quarter.
Gross margin as a percentage of sales for the quarter was 35% compared to 37% in the same quarter last year. Operating profit decreased to $10.4 million from $12.7 million in the year-ago quarter.
Rick Brooks, Chief Executive Officer of Zumiez Inc. said, "While our third quarter earnings performance was in-line with expectations, we did experience sales and product margins during September and October that were below our year-to-date trends through August."
For the nine-month period, net income decreased to $10.9 million or $0.37 per share from $12.9 million or $0.44 per share last year. Sales for the period increased to $283.2 million from $254.8 million in the same period last year. Comparable store sales decreased 3.2% compared to an increase of 12.2% last year.
Looking ahead, the company reiterated its earnings outlook for the full year. The company still expects earnings to be between $0.52 per share and $0.57 per share for the fiscal.
Based on an anticipated opening of 58 new stores and a negative mid-teen comparable store sales decline for the fourth quarter of fiscal 2008, the company still expects earnings to be between $0.52 per share and $0.57 per share for the fiscal.
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